Read more about how we help unlock investmentWe are in a critical decade for the global response to climate change. Limiting global warming to 1.5°C will require all emissions to be halved by 2030. At the same time, the devastating consequences of changing weather patterns mean that global infrastructure and vulnerable communities must be made resilient. To meet these twin challenges, large-scale investment must be delivered at pace.
According to the Climate Policy Initiative, annual average climate finance flows reached US$480bn in the decade to 2020. The organisation estimates that needs to increase to US$4.3trn a year throughout the 2020s if we are to avoid the worst impacts of climate change.
Mott MacDonald has been working with governments, financial institutions and communities to unlock investment in infrastructure for many decades, and on climate finance for more than 10 years.
Climate finance: a supply and demand problem
Governments, project proponents and businesses seeking finance – the ‘demand-side’ – often face challenges in accessing funding at scale. Many need a better understanding of what type of finance is available to them, as the current climate finance landscape is highly fragmented and complex, as well as support in delivering investable propositions.
Finance providers seeking to invest in climate projects or businesses in local and international markets – the ‘supply-side’ – often have a limited understanding of the funding pipelines available to them, especially in unfamiliar sectors or geographies that lack the appropriate policies, governance, structures and regulations. To ensure investment is most effectively apportioned, finance providers need a rigorous analysis of existing funding gaps and the priorities of vulnerable communities and countries.
Where project pipelines exist, they are often not ‘investment-ready’ and need targeted technical and capacity building support to be translated into propositions that can be credibly presented to finance providers.
Our approach: bridging the gap between supply and demand
Mott MacDonald has been helping bridge the gap between those seeking finance and those looking to invest for more than 10 years.
We help governments, businesses and project proponents in developing countries identify and attract funding to implement their Nationally Determined Contributions (NDCs) and other climate plans. At the same time, we also guide finance providers and investors as they take advantage of the new market opportunities that can help meet their net-zero and climate ambitions. Our strategic and technical advice helps clients save money and resources, protect property, natural ecosystems and people, and, ultimately, achieve climate- resilient and low- carbon development.
Our approach is built around four stages – discover, assess, plan and capitalise. It is an approach that spans ‘upstream’ policy dialogue, ‘midstream’ project identification and ‘downstream’ finance structures and project preparation.
Discover
Climate finance ecosystem and flow mapping
Mapping climate finance flows and ecosystems in a country or region to understand priority sectors and technologies. This helps to establish the business case for new initiatives and help beneficiaries or donors understand how their activities align to country priorities.
Market mapping
Identifying the size and type of market and investment opportunities to help establish the business case for new initiatives and help investors understand the climate impact of their activities.
Assess
Capacity assessment
Assessing the institutional and governance capacity along the climate finance investment chain.
Enabling environmental diagnostic
Evaluating the extent to which the domestic market is supporting climate investments and where the greatest opportunities may be. These enabling conditions typically relate to factors such as the regulatory framework and the market environment.
Plan
Strategy development
Developing strategies to attract concessional finance and/or private capital for delivering climate ambitions.
Capacity building
Capacity building for climate finance recipient countries: access requirements for climate funds and support in becoming accredited to climate funds.
Pipeline identification
Identifying a pipeline of potential projects using both top-down and bottom-up approaches, considering the beneficiary’s priorities combined with in-depth consultation and engagement with key stakeholders and potential project proponents, helping them structure their projects in line with funder’s requirements.
Capitalise
Design of new financing vehicles
Developing the business proposition for new financing vehicles that aim to deliver strategies and financing for low-emission and climate resilient solutions.
Detailed project preparation
Designing and structuring fully fledged projects aligned with the beneficiary priorities and the funders’ requirements.
Climate due diligence
Performing due diligence for climate-related investments by conducting climate change risk assessments on physical and transition risks.
Contact
Virginie Fayolle
Technical principal - climate finance